Federal Programs
Weekly Brief
Curated intelligence for district federal program leads
Provided by EnchantED LLC
Indiana Secures Broadest “Returning Education to the States” Waiver Yet — $50M in Federal Funds Now Combinable, High School Accountability Redesigned
On June 16, Secretary of Education Linda McMahon traveled to Plainfield High School in Hendricks County to announce federal approval of Indiana’s “Returning Education to the States” waiver — the broadest such waiver approved for any state to date and only the third issued nationwide, following Iowa in January and Louisiana last month. The waiver, developed by IDOE under Secretary Katie Jenner and Governor Mike Braun, grants Indiana two major authorities: (1) Funding flexibility — Indiana may combine the state portion (approximately 5%) of five federal formula funds — Title II-A (teacher professional development), Title III-A (English learners), Title IV-A (student support and enrichment), state assessment grants, and 21st Century Community Learning Centers — into a single flexible pool of approximately $50 million over four years, to be directed toward statewide initiatives of IDOE’s choosing. A separate pilot allows up to 15% of Indiana LEAs to consolidate their district-level Title II-A and Title IV-A funding for more flexible local use. (2) Accountability flexibility — Indiana may use its own A–F high school accountability system, effective 2026–27, in place of ESSA’s federal accountability requirements. Under the new system, high schools will be graded: 10% graduation rates, 10% standardized test results (including SAT), and 80% on other indicators including AP coursework, college credits, CTE credentials, industry certifications, and end-of-course assessments in Biology and U.S. Government. Indiana’s original waiver request included broader flexibility including district-level consolidation of all formula funds and school improvement dollars — ED did not approve those portions.
This waiver has immediate operational implications for every Indiana LEA. On funding: the state-level portion of Title II-A, Title III-A, Title IV-A, and assessment and 21st CCLC funds that previously flowed through separate streams will now be managed by IDOE as a combined pool — districts should expect different subgrant structures, timelines, and reporting requirements for state-directed versus district-directed portions of these funds beginning in FY2027. The 15% Title II-A/IV-A district pilot is opt-in — IDOE will announce eligibility and application processes. On accountability: Indiana high schools will no longer be required to maintain two parallel accountability systems (state A–F and federal ESSA). The new system’s 80% weighting on college and career readiness indicators — rather than academic achievement — is a fundamental shift in how federal school improvement designations will be triggered. Districts should brief principals and curriculum directors on what the new accountability indicators mean for scheduling, course offerings, and the dual enrollment and CTE partnerships that now carry significant accountability weight.
OSEP Moves to HHS, OCR Moves to DOJ — The Education Department Now Has 14 Interagency Agreements Across Six Agencies
On June 16, the U.S. Department of Education announced four new interagency agreements — bringing the total to 14 across six federal agencies since May 2025. The most significant: the Office of Special Education and Rehabilitative Services (OSERS), which houses the Office of Special Education Programs (OSEP) and oversees $15.5 billion in FY2026 IDEA funding, will transfer day-to-day administration to the Department of Health and Human Services (HHS). Separately, key civil rights enforcement and investigation functions will transfer from ED’s Office for Civil Rights (OCR) to the Department of Justice (DOJ). A fourth agreement transfers desegregation technical assistance and training activities to DOJ as well. FY2026 IDEA grants will continue to be managed through ED’s existing grant system; subsequent allocations will be handled through HHS’s grant and payment management system. IDEA, Title IX, Section 504, and FERPA remain in force — the interagency agreements do not alter any statute.
For Indiana special education directors: FY2026 IDEA grants are not affected — continue current operations through the existing ED/IDOE system. However, the transition to HHS for future IDEA administration raises a series of unanswered operational questions that the National Association of State Directors of Special Education has formally identified, including which HHS office will OSERS report to, which system will handle future grant award notifications, and which agency will respond to IDEA compliance inquiries. Monitor IDOE’s Office of Special Education for state-level guidance on how Indiana will interface with the new HHS-administered OSEP. For districts with pending OCR civil rights complaints: the transfer of OCR investigation functions to DOJ creates additional uncertainty about complaint processing timelines and contacts. If your district has a pending OCR complaint and has not heard from the agency in more than 60 days, contact your district’s legal counsel now. The AOTA, The Arc, and multiple disability rights organizations have formally opposed the HHS transfer as pushing students toward a “medical model” of disability — litigation is possible.
Indiana’s 15% Title II-A / Title IV-A Consolidation Pilot — What the Waiver Actually Allows at the District Level
While the broadest provisions of Indiana’s ESSA waiver operate at the state level, one component directly affects district-level federal program management: a pilot program permitting up to 15% of Indiana LEAs to consolidate their district-allocated portions of Title II-A (Supporting Effective Instruction) and Title IV-A (Student Support and Academic Enrichment) into a single flexible funding stream. This pilot is described in the waiver as allowing districts to direct these funds to “areas where students need them most” without maintaining separate program accounts, reporting structures, or expenditure plans for each title. IDOE has not yet released eligibility criteria, application processes, or timelines for the pilot — those details are expected in the coming weeks. Participation appears to be opt-in rather than automatic.
This pilot is potentially significant for districts with smaller Title II-A and Title IV-A allocations where maintaining separate programmatic compliance structures consumes disproportionate staff time. However, before opting in, federal program coordinators should carefully consider three questions: (1) What reporting and accountability requirements does the pilot impose in exchange for consolidation flexibility? (2) Does participation affect how EL students are served — since Title III is not included in the district-level pilot, Title IV-A funds may be doing supplemental EL work that would need to be tracked separately; and (3) Does consolidation affect the district’s ability to use these funds as a match or supplement for other competitive grants? Contact IDOE’s federal programs team as soon as eligibility guidance is released, and consult your district’s legal counsel before opting into any consolidation pilot.
Indiana High School Accountability Fundamentally Shifts — ESSA School Improvement Designations Will Now Follow State A–F System
Under the approved waiver, Indiana will no longer run parallel state and federal accountability systems for high schools beginning in the 2026–27 school year. Federal school improvement designations — Comprehensive Support and Improvement (CSI) and Targeted Support and Improvement (TSI) — will now be determined using Indiana’s new A–F high school accountability system rather than ESSA’s federal academic indicator requirements. The new system weights graduation rates at 10%, standardized test results (SAT) at 10%, and college and career readiness indicators at 80% — including AP, dual enrollment, CTE credentials, industry certifications, end-of-course Biology and U.S. Government assessments, and the Honors Diploma Seal. The Education Trust, a prominent equity advocacy organization, publicly criticized the waiver, stating it “will mask student performance and move millions of dollars in dedicated funding away from students who need it most.”
High school federal program coordinators must understand what this shift means for school improvement identification and the associated funding obligations. Under the previous ESSA system, schools could be identified as CSI or TSI based primarily on academic proficiency and subgroup performance gaps in English Language Arts and math. Under the new system, a high school with low reading and math proficiency but strong CTE credentials and dual enrollment completion rates could perform well on the A–F scale and avoid school improvement designation. Conversely, schools with strong academic scores but limited college and career offerings could be rated lower. Review your high schools’ current A–F projected ratings under the new framework with your IDOE school improvement contact, and update your consolidated plan to reflect how Title I set-asides and improvement funding will be triggered under the new system beginning in fall 2026.
Senate Appropriations Committee Releases FY2027 Labor-HHS-Education Bill — Restores Title II-A, Title III, and Reverses October Rescission
The Senate Appropriations Committee this week released its own FY2027 Labor, Health and Human Services, Education and Related Agencies bill — a dramatically different document from the House’s version. The Senate bill funds Title I at the FY2026 enacted level with no reduction; restores Title II-A (Supporting Effective Instruction) at $2.23 billion; maintains Title III-A (English Language Acquisition) at $890 million; and explicitly does not include the $1.6 billion rescission of already-appropriated FY2026 Title II-A funds proposed by the House. The bill passed the Senate Appropriations Committee with bipartisan support, including the votes of several Republican senators. The bill now moves to the Senate floor, where it is expected to pass with a bipartisan coalition. Final enactment requires reconciliation with the House bill in conference.
This is the best news for Title II-A and Title III since the FY2027 House subcommittee advanced its cuts. The Senate bill establishing a bipartisan baseline for full restoration of these programs significantly increases the likelihood that the final enacted legislation — whenever it arrives — will preserve Title II-A and Title III at or near current levels. The $1.6 billion October rescission risk is now materially reduced, though not eliminated until final enactment. Indiana districts can begin cautious planning for continued Title II-A funding in FY2027, while still maintaining the dual-scenario budget framework. Monitor conference committee developments closely in July and August.
School-Based Mental Health Services Competition Deadline Now Confirmed — Indiana Districts Must Submit by August 10, 2026
ED has now confirmed the application deadline for the FY2026 School-Based Mental Health Services (SBMH) competition: August 10, 2026. The competition is posted on Grants.gov and open to high-need LEAs with documented psychologist-to-student ratios that exceed the NASP-recommended 1:500 standard. Awards from prior cycles have ranged from $750,000 to $2 million over multi-year periods; $164 million is appropriated for this FY2026 competition. Applications are submitted through Grants.gov — not GrantSolutions. A separate and concurrent competition, the Mental Health Service Professional Demonstration (MHSPD) grants, targets LEAs seeking to develop school-based mental health professional training pipelines. Both competitions use Grants.gov.
Indiana districts have approximately seven weeks to submit — begin drafting immediately if not already started. Document your current psychologist-to-student ratio using 2025–26 enrollment and staffing data; any ratio beyond 1:500 is the core eligibility basis. Narrative sections should address the barriers to recruiting school psychologists in your area — including the Grad PLUS loan elimination’s impact on graduate school psychology pipelines — and describe your partnership with community mental health providers. Verify Grants.gov registration and SAM.gov active status before submitting; this competition uses Grants.gov, not GrantSolutions. The August 10 deadline is firm.
National Reading Panel Report Turns 25 — ED Marks Milestone as “Science of Reading” Remains Central to Federal Literacy Spending Requirements
Education Week published a major feature on June 17 marking the 25th anniversary of the National Reading Panel’s landmark 2000 report, which has served as the evidence foundation for structured literacy instruction and the “science of reading” movement. The anniversary comes as Indiana and more than 40 other states have enacted evidence-based reading legislation aligned to the report’s five pillars — phonemic awareness, phonics, fluency, vocabulary, and comprehension — and as federal competitive grant priorities continue to require alignment with evidence-based literacy practices. The report’s current influence is visible in Indiana’s IREAD-3 assessment, the state’s literacy plan requirements, and the evidence-based practice requirements in Title I school improvement and Title IV-A consolidated plans.
As Indiana’s ESSA waiver shifts high school accountability away from academic proficiency, the continued federal emphasis on evidence-based reading instruction at the elementary level remains unchanged. Title I school improvement plans, consolidated applications, and any Indiana Reading Roadmap investments must cite evidence aligned to structured literacy research — the National Reading Panel report and What Works Clearinghouse reading practice guides remain the foundational references. Indiana districts receiving Lilly Endowment / Freedom and Opportunity Fund literacy subgrants should ensure their literacy investments also cite this evidence base, as IDOE will require documentation of evidence alignment in subgrant reporting.
Seven weeks remain. Document 2025–26 psychologist-to-student ratios now. Connect your recruitment barrier narrative to the Grad PLUS loan elimination impacting school psychology pipelines. Verify Grants.gov and SAM.gov registrations are both current. Strong applicants will also describe a partnership with community mental health providers and a multi-year sustainability plan for newly hired psychologists.
Don’t opt in before reading the eligibility requirements and understanding the pilot’s accountability and reporting obligations. Consolidation may reduce administrative burden, but also changes how funds can be documented and tracked — particularly important if your district uses Title II-A or Title IV-A as match or supplement for competitive grants. Consult legal counsel before participating.
Apply based on your school’s current CSI or TSI designation — the new accountability system takes effect 2026–27 and will produce new identification lists for the next cohort. If your high school might lose its CSI designation under the new college-and-career-focused A–F system, this may be your last cohort opportunity under that designation. Funded with stable Title I school improvement dollars.
Three weeks remain. Submit focused, operational comments by July 13 — describe the real-world impact of the drawdown justification requirement on LEA subrecipients, the ambiguity of the DEI cost prohibition for instructional programming, and the lack of transition period. Coordinate with district legal counsel and consider joining AASA, IDOE, or NSBA coalition comments to amplify impact.
Indiana’s ESSA Waiver: What Federal Program Coordinators Must Do Before the 2026–27 School Year
Indiana’s “Returning Education to the States” waiver is the most consequential change to federal program administration in Indiana since ESSA was enacted in 2015. It does not eliminate any federal funding, but it fundamentally changes how that funding is structured, directed, and reported at both the state and district level. Federal program coordinators who wait for IDOE to send a comprehensive guide before acting will miss the planning window.
What to do now — before IDOE releases full guidance: First, pull your district’s FY2026 Title II-A and Title IV-A allocation notices and document exactly how those funds are currently being spent, what compliance reporting they require, and whether they are being used as a supplement or match in any competitive grant application. If IDOE’s pilot allows consolidation of these two streams, you need a clear current-state picture before you can evaluate whether consolidation benefits you. Second, meet with your high school principals and curriculum directors to walk through Indiana’s new A–F high school accountability indicators — especially the 80% college-and-career weighting. Every high school in your district should understand how it is likely to perform under the new system, and whether any current course offerings or partnership agreements need to be strengthened or documented differently for accountability purposes.
Third, update your consolidated application narrative. The shift to Indiana’s own A–F system for federal school improvement designations means your Title I school improvement set-asides, CSI and TSI identification lists, and improvement plan timelines will all be recalibrated. Work with your IDOE school improvement contact to confirm which schools are currently identified and what the transition means for their improvement plans. Schools currently identified under ESSA’s federal system will continue their improvement plans until IDOE updates identification lists under the new system — this will take at least one full school year to cycle through.
Watch for IDOE to begin releasing implementation guidance on the ESSA waiver — particularly the Title II-A / Title IV-A district pilot eligibility criteria, which could come any week. Also monitor for any Senate floor action on the FY2027 Labor-HHS-Education bill following its bipartisan committee passage; Senate floor action would further cement the case for restoring Title II-A and Title III in conference. Indiana districts should track the Louisiana Senate runoff on June 27 and prepare UGR comments for the July 13 deadline. With the SBMH application deadline now set at August 10 and seven weeks remaining, districts that have not yet started their application narratives should do so this week.
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